Income-tax Act, 2025

Computation of actual cost - Section 39

Computation of actual cost.

39. (1) The actual cost of an asset used for the purposes of the business or profession shall be the actual cost to the assessee, as reduced by the following amounts:

(a) part of cost of asset, if any, met by any other person or authority, directly or indirectly;

(b) goods and services tax paid in respect of which credit of input tax has been claimed and allowed under the relevant law;

(c) duty of excise or additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of which a claim of credit has been made and allowed under the Central Excise Rules, 1944;

(d) subsidy, grant or reimbursement, by whatever name called, if any, relatable to the acquisition of the asset, received, directly or indirectly, by the assessee from

(i) the Central Government;

(ii) a State Government;

(iii) any authority established under any law; or

(iv) any other person.

(2) The payment or aggregate of payments exceeding Rs. 10,000 in a day for acquisition of an asset or part thereof, made to a person in a mode otherwise than by specified banking or online mode, shall be excluded from the actual cost of that asset.

(3) In a case where the subsidy, grant or reimbursement referred to in sub-section (1)(d) is not directly relatable to the asset acquired, the amount of reduction under sub-section (1)(d) shall be determined as under:

where,

A = total amount of subsidy, grant or reimbursement not directly relatable to the asset;

B = cost of the asset acquired for which actual cost is to be determined;

C = cost of all the assets in respect of or in reference to which the subsidy or grant or reimbursement is so received.

(4) In circumstances specified under column B of the Table below, the actual cost of the asset shall be as specified in column C thereof.

TABLE

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